Andy Burnham has said he wants to breathe new life back into Britain’s high streets, and he is right to make it a priority. The decline of town centres across the country is evident, with pubs closed, thousands of local shops disappeared, and too many high streets now a mix of empty units and businesses that add little to their communities.
The government has promised action, with support for pubs and greater powers for councils to prevent the proliferation of vape and betting shops. While welcome, there is a glaring omission: the restaurants, cafés, takeaways, and other independent hospitality businesses that local people want to see thriving.
Hospitality faces the same pressures as pubs
Labour has recognised the pressures facing pubs, but independent cafés and restaurants face exactly the same challenges. Wages have risen, food and energy remain expensive, business rates are a burden, and margins are tight. Additionally, most food bought from a supermarket is zero-rated for VAT, but sit-down meals in restaurants generally attract VAT at 20%, as do hot takeaway foods like fish and chips.
The UK's 20% VAT rate on hospitality is among the highest in Europe. Restaurant food is taxed at around 10% in France, Spain, and Italy, while Germany cut its rate to 7% at the start of this year. This raises a simple question: should eating out really be taxed as though it is a luxury?
Everyday activities, not extravagances
A meal in a local restaurant isn't necessarily an extravagance, nor is meeting a friend for a coffee or picking up fish and chips for the family on a Friday night. These are everyday activities, and the businesses providing them are often small, independent operations employing local people and reinvesting in their communities.
At BusinessesForSale.com, we see this part of the economy daily. Currently, there are more than 1,200 pubs and close to 500 fish and chip shops for sale on our platform, alongside thousands of restaurants, cafés, and other hospitality businesses. Not every owner selling is in difficulty, but through our users, we see how difficult the economics of running these businesses have become.
Making high streets viable
If we want vibrant high streets, we need people willing to take risks. Someone must invest savings, take on leases, employ staff, and open doors every morning. We should make that proposition more attractive, not less. The new Prime Minister has said he is in "listening mode" as he develops a ten-year plan to bring hope back to communities. If that listening is serious, hospitality VAT must be part of the conversation, along with business rates, employment costs, and incentives for those investing in independent businesses.
Popular interventions that generate headlines should not be mistaken for a genuine strategy. Helping pubs is popular, and giving councils powers over vape and betting shops sends a clear message. But stopping unwanted businesses is only half the job. We also need to make it economically viable for the businesses we do want to open, survive, and grow.
A thriving high street needs pubs, but also cafés, restaurants, and takeaways. Yet we continue to tax and regulate them in ways that make running them increasingly difficult. Britain talks about encouraging entrepreneurship and revitalising local economies, but that ambition must extend to those taking real financial risks to run ordinary businesses in our towns and cities. The government is right to want to bring hope back to high streets, but it will take more than saving the pub and stopping the next vape shop. If we want thriving high streets, we need to stop making it so difficult for the businesses we want on them to survive.
